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Press Release

Taxpayer Group Offers Blueprint for Beating Medicare's Bankruptcy
From Renal Disease to Recovery Audits, Systemic Fiscal Reforms Needed

For Immediate Release April 24, 2008
Pete Sepp, (703) 683-5700

(Alexandria, Va.) -- As federal lawmakers appeared headed toward a pre-Memorial Day showdown over key changes to Medicare benefit and reimbursement policies, the 362,000-member National Taxpayers Union (NTU) today offered a comprehensive blueprint to put the program on a more solid fiscal foundation -- without tax hikes or price controls.

"When it comes to the financial condition of Medicare, the caregiver has as many ailments as the patients," NTU Vice President for Policy and Communications Pete Sepp said. "Unless Congress takes decisive steps, large and small, to control spending and empower consumers, the nation's taxpayers will soon be suffering from huge burdens they cannot carry."

Last year, the House of Representatives passed the Children's Health and Medicare Protection (CHAMP) Act, which would alter a number of federal health care policies. With the Senate Finance Committee preparing to consider its own version of the CHAMP Act, and with numerous other legislative proposals likely to come under scrutiny during this process, NTU prepared a lengthy analysis of "dos" and don'ts" for policymakers. Among the recommendations:

  • Enact Common-Sense Coverage Reforms. The private sector skillfully employs "disease management" strategies that contain costs without risking quality of care. Taking greater advantage of these gains through Patient Coverage Extension (PCE) for privately insured dialysis would relieve taxpayer burdens associated with inefficient Medicare coverage. PCE would allow patients to retain private insurance for dialysis instead of being forced onto the Medicare rolls after a certain period.
  • Maintain Oversight. Tens of billions of tax dollars are lost every year to waste, fraud, and abuse in federal health programs. Congress should mandate more internal accounting and allow successful initiatives like Recovery Audit Contractors to continue.
  • Preserve Accountability. Congress should reject attempts to repeal the statutory "trigger" that requires the Trustees of Medicare to issue a warning if overall program funding from general revenues exceeds a 45 percent share in two consecutive annual reports.
  • Think Outside the Existing Structure. NTU's research affiliate has determined that a comprehensive but still modest means-test for cash and in-kind benefits could yield over $75 billion in annual savings. This kind of spending restraint, combined with health care choice measures that would allow consumers to purchase health insurance across state lines, could make Medicare's future costs manageable.

Although NTU opposed the House CHAMP Act in its final form, Sepp contends certain provisions of this bill, combined with others, could be salvaged to provide a Medicare package that helps rather than hurts taxpayers -- all while strengthening the crucial relationship between consumers and providers of health care.

"Medicare's Trustees continue to warn that enacting solid changes sooner will avoid harsh decisions later," he concluded. "To taxpayers, the word 'sooner' means now."

NTU is a nonprofit, nonpartisan citizen group founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Note: NTU's Medicare policy blueprint, along with other work on entitlement reform, is available at